Introducing Spiceworks: A social network for techies, IT professionals

Despite a downbeat outlook, last week’s LinkedIn report underscored the power of a social network that offers professionals both a way to connect with one another, as well as job-hunting and talent recruitment services.

In fact, other companies are embracing a similar business model, though on a smaller scale and aimed at narrower pools of professionals in specific fields.

That’s what a small firm called Spiceworks, whose technology was inspired partly by the late Steve Jobs, has done with a social networking site geared mainly to techies, IT engineers and software programmers and designers. Last week, the Austin-based company said it just closed a $57 million financing round from Goldman Sachs. Spiceworks has already raised $111 million in investments.

“We do more than just connect people together,” co-founder and Chief Executive Scott Abel told MarketWatch. “We provide them the tools they need to do their jobs everyday. IT pros on Spiceworks are there for one and only one reason: To do their jobs everyday.”

Just like LinkedIn
and Facebook
, Spiceworks is a social networking site, but its members are mostly IT professionals looking to network and engage on issues related to their field. Users can also download a free app aimed at helping IT administrators manage their networks. Abel says the app was partly inspired by Steve Jobs, with whom Abel worked in the 80s and 90s.

“He used to say, ‘Simple things should be simple. Complex things not too hard,’” he said, recalling Jobs’ emphasis on simplicity, a principle that he says is evident in “the way iTunes just scans your computer and finds all the music on it for you.”

“Steve\’s mantra just kept running around in my head: How could we use technology to dramatically simplify this process for the lone IT guy in a 100-person law firm?” he said. “And then it hit us … we\’d let the software do all the work. Just like iTunes automatically finds all the music on your computer, we built Spiceworks so it would automatically find all the computers and software in your network.”

Spiceworks, which has about 250 employees, now reaches more than 5 million IT professionals. While that number may look small compared to LinkedIn’s reach of more than 277 million professionals on its network, it represents a third of the 15 million IT professionals working in a $3 trillion industry. Spiceworks makes money through ads and marketing services and premium subscriptions.

That market’s potential is sizable, said David Campbell, a managing director at Goldman Sachs and now a Spiceworks board member.

“When you look at the business competition side, you can consider those guys competing for a bit of advertising and marketing dollars that would go to the likes of Google,” he told MarketWatch. “It’s a large market and a it is a large spend. These guys have a platform that’s unlike anything.”

In fact, the Spiceworks model is just part of a broader trend in social networking based on the creation of specialized vertical networks.

“There are different scenarios that are great businesses in terms of connecting people together,” Gartner analyst Brian Blau told MarketWatch.

Abel noted that more than $450 million in capital have followed in these companies in the last six to seven years. He cited the examples of GitHub, a network for software developers and Edmodo, for educators.

Spiceworks

“Unlike the broad consumer networks, these vertical networks are all about helping the people in those disciplines do their job every day,” he added. “All of these networks provide not just community and connections, but tools which automate the workflow of their discipline.”

That’s what drew Philip Moya to Spiceworks, which he said helped him perform his duties as IT manager at the San Antonio Kidney Disease Center, a small outfit with about 100 employees, including 29 doctors.

Moya’s Spiceworks page shows his number of followers and the people he is following, but also the kinds of technology he’s focused on and the IT projects he’s been involved with. Moya, whose Spiceworks handle is ‘philipmjr,’ said the site helped him connect with “a gentleman in the community, john773, who is a VMware expert.”

His firm ended up hiring john773’s services to help implement a VMware system.

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